Commentary and analysis to persuade people to become socialist and to act for themselves, organizing democratically and without leaders, to bring about a world of common ownership and free access. We are solely concerned with building a movement of socialists for socialism. We are not reformists with a programme of policies to patch up capitalism.

Monday, January 20, 2014

The Millions V The Billions

“While global direct investment has shown some decline, dropping by 18 percent in 2012, in Africa foreign direct investment rose by five percent,” Ken Ogwang, an economic expert affiliated with the Kenya Private Sector Alliance (KEPSA), which has a membership of over 60 businesses, told IPS. Ogwang predicts that these discoveries will soon see African countries dominating the list of the 15 fastest-growing economies in the world. “More African countries, Kenya being a model example in East Africa, now favour a market-based economy, which is highly competitive and the most liberal economic system. In this system, market trends are driven by supply and demand with very few restrictions on who the actors are. [It is] a favourable environment for foreign investors,” he said, referring to the local mobile phone industry, which has been dominated by foreign investors because of its favourable regulatory policies. As a result, growth in this sector is phenomenal. In the first 11 months of 2013, Kenya’s mobile phone money transactions were 19.5 billion dollars, which is more than the country’s current 18.4-billion-dollar national budget.”

Since 2012, Kenya has made a series of mineral discoveries, including unearthing 62.4 billion dollars worth of Niobium – a rare earth deposit. The discovery in Kenya’s Kwale County has made the area among the world’s top five rare earth deposits sites, and allows Kenya to enter a market that has long been dominated by China. In 2012, Kenya discovered 600 million barrels of oil reserves in Turkana county, one of the country’s poorest regions. It was announced on Jan. 15 that two more wells struck oil, increasing estimate reserves to one billion barrels of oil.

Last year, both Uganda and Mozambique discovered oil. In 2006, an estimated two billion barrels of oil reserves were discovered in western Uganda, but last year’s discovery brings Uganda’s total oil deposits to 3.5 billion barrels. Mozambique’s first oil discovery last year is estimated to be 200 million barrels. The recent boom in new mining discoveries in countries such as Niger, Sierra Leone and Zambia will attract billions in foreign direct investments. Other countries like Mozambique, Tanzania and Uganda will similarly attract billions due to petroleum discoveries there,” Antony Mokaya of the Kenya Land Alliance, a local umbrella network of NGOs and individuals working on land reforms, told IPS.

Statistics by the Africa Economic Outlook, which provides comprehensive data on Africa economies, show that China is the largest destination for African exports, accounting for a quarter of all exports. Trade with Brazil, Russia, India and China – the economic bloc referred to as BRICs – now accounts for 36 percent or 144 billion dollars of Africa’s exports, up from only nine percent in 2002. In comparison, Africa’s trade with the European Union and the United States combined totals 148 billion dollars.

According to the World Bank, some of the world’s poorest people live in Africa, with one out of two Africans living in extreme poverty. Zimbabwe is one of the world’s top 10 diamond producers. But six out of every 10 households in Zimbabwe, a country of about 13 million people, are living in dire poverty. The Democratic Republic of Congo (DRC) is another African country rich in diamonds, with its mineral wealth estimated in the trillions of dollars. But according to the United Nations, about 75 percent of its people live below the poverty line. More than half of these have no access to drinking water or to basic healthcare. Three out of every 10 children are poorly nourished, with up to 20 percent of them predicted to die by the age of five.

Terry Mutsvanga, director of the Coalition Against Corruption, an anti-corruption lobby group in Zimbabwe, cautioned that Africa will first have to rein in its corrupt politicians before its resources can enrich its own people. “Without Africa dealing with the cancer of political corruption blighting the continent and robbing it of revenue from mineral resources through corrupt politicians receiving bribes from investors … the continent shall [continue to have] the worst poverty levels globally.”

Independent economic analyst Jameson Gatawa from Zimbabwe agreed. “Underhanded dealings in the mining of diamonds and other rich minerals here have fuelled poverty. The rich are getting richer with the poor becoming poorer,”